Customer support

Find answers to common questions or get in touch with us

What is the Buyer Rate?

The "Buyer Rate" is the simple interest rate the buyer would receive if they hold the loan part until maturity, and the borrower continues to make all payments on time. It takes into account the premium or discount applied to the loan part by the seller. If a borrower prepays a loan early or the buyer decides to sell the loan part early they may receive a return different to the Buyer Rate. The Buyer Rate does not include the Funding Circle Servicing Fee. 
 

The Buyer Rate satisfies the following equation:

BR_equation.JPG 
Where;

BR_equation2.JPG

You can approximate the Buyer Rate by using the rate function in Excel. However, there are sometimes small differences due to the time to the next repayment not being fully captured in the pmt function.

Have more questions? Submit a request

0 Comments

Article is closed for comments.